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Firm Updates and Announcements

Beyond the Recall: California Regulations

California’s legislative session has just wrapped up and the Governor’s recall election is now behind us. With the failure of the recall of Governor Newsom now behind us, there is less political turbulence in Sacramento.

Democrats still hold supermajorities in both houses of the Legislature, making it much easier to pass highly progressive majority vote bills in the labor, environmental, and consumer protection areas.

And that means you need to have a solid strategy for navigating California’s political landscape.

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Unemployment Insurance Fund Debt Could Decimate Struggling Businesses

At the start of the pandemic, California’s unemployment insurance fund did its job, softening the blow of job losses suffered by millions of workers—but COVID completely wiped the fund out. In order to provide unemployment benefits after the UI fund was emptied, California borrowed over $21 billion from the federal government. Now, California is faced with a dilemma: pay back the debt or steeply raise taxes on employers.

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Tax Deduction Suspension a Bust for Business

Last year California's governor and legislators codified a complete suspension of net operating loss (NOL) tax deductions for three years—a move meant to save the state general fund $4.5 billion at a great cost to businesses. But now the Legislative Analyst’s Office and the Department of Finance are projecting a $15 billion budget surplus, rendering the NOL freeze completely unnecessary.

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Tom SheehyCA Taxes, CA Economy